Chanel has invested $25 million in carbon credit offsets that reduce or remove 6.9 million metric ton of emissions per year, according to its climate report.

The French luxury brand published its Mission 1.5 report detailing its climate action plan to 2030.

Chanel committed to invest in nature-based solutions to remove and avoid emissions at least equal to its full footprint. It’s part of the major fashion house climate strategies to reduce its carbon emissions.

Chanel’s Carbon Emissions

Chanel aims to deliver its ambition for a low carbon future through two commitments: reduce and accelerate.

Commitment 1: Reduce through energy efficiency

Reduce means cutting Chanel’s scope 1 and 2 emissions by 50% by 2030 and its value chain emissions (Scope 3) by 40% by 2030. Part of this climate pledge is also the goal to shift to 100% renewable electricity across its operations by 2025.

As of 2021, Chanel recorded a total emissions of 870,800 tCO2e, with the following breakdown:

Scope 1: 19,600 
Scope 2: 22,200 
Scope 3: 829,000

The image below shows the components of the firm’s total carbon footprint.

Reducing its carbon emissions involves many strategies. A major part of that is using cutting-edge architecture that promotes low carbon footprint buildings.

And so Chanel strives to follow the most exacting certification standards on energy efficiency for its boutiques.

These include LEED (Leadership in Energy and Environmental Design), and BREEAM (Building Research Establishment Environmental Assessment Method) and HQE (Haute Qualité Environnementale).

As for its Scope 3 emissions reduction efforts, the company is setting high standards for its raw materials. They’re sourced from suppliers or growers that use a more regenerative and low carbon approach to agriculture.

Chanel is also opting for lightweight packaging products that have a lower carbon footprint. It also has been using reusable packaging for some of its foundation products.

Employee travel (7% of total emissions) is also cut down by using video conference meetings.

Commitment 2: Accelerate with carbon credit offsets

As per Chanel’s Mission 1.5 report:

“Reducing the impact of our business on climate change is a part of our journey to achieve Mission 1.5°, but we also recognise the role we can play in accelerating the transition to a low-carbon future beyond our own operations and value chain.”

Accelerate involves helping to speed up the transition to a lower carbon and more resilient planet. This is where Chanel seeks to invest in nature-based solutions to avoid and remove CO2 equal to its global emissions.

The fashion company also supports initiatives that protect and restore the environment. At the same, building resilience in communities to adapt to climate change.

In the past year, Chanel began investing in two separate funds which help advance its commitment to accelerate and adapt. These are:

Livelihoods Carbon Fund (LCF3): investing in LCF3 aims to source high-quality certified carbon credit offsets through carbon projects that restore natural ecosystems.

Other nature-based projects include agroforestry and regenerative agriculture. The LCF3 fund aims to create positive social, economic, and environmental impact for the communities it partners with.

Landscape Resilience Fund (LRF): Chanel is the anchor investor and sits on the board of LRF. It’s an independent foundation co-developed by climate solution company South Pole and the World Wide Fund for Nature (WWF).

The fund helps enable the most vulnerable people in rural landscapes to adapt to climate change by financing small businesses and projects. They promote climate resilient agriculture, forestry and sustainable development.

Below is the consolidated overview of the impacts of the carbon projects that Chanel invested in 2021. The results are based on the total contribution from investors.

As shown in the image above, Chanel’s investments in carbon credit offset projects remove or reduce about 6.9 million metric tons of CO2e a year.

The projects support the livelihoods of communities in five landscape areas in Africa, Southeast Asia and Latin America.

Internally, Chanel is also imposing an internal carbon price of $60 per ton of CO2. The fashion house is using this carbon pricing system to assess all its major investments. It acts as an incentive to develop projects that will help reduce the company’s carbon footprint.

Between 2019 and 2024, Chanel is investing over $55m in a collection of carbon projects that protect and preserve forests, mangroves, and peatlands.

These projects more than offset the carbon emissions of the firm’s operations and value chain, meeting its goal to be carbon neutral from 2019 onwards.

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An inventory of net zero pledges found gaps among the world’s biggest companies in their promises to reduce GHG emissions.

The Net Zero Tracker reported its latest review of climate pledges from nations, regions, and corporations. The initiative noted huge year-on-year increases in the number of entities that have made promises to cut their GHG emissions.

But an in-depth assessment revealed some shortcomings in those climate promises. For instance, in almost half of the cases, companies expressed plans to reduce emissions to net zero but without clear details on how.

Net Zero Tracker examines publicly available data for about 200 countries and large public companies. It’s run in part by the UK-based Energy and Climate Intelligence Unit (ECIU) and the University of Oxford.

Their 2022 annual inventory report covered 702 companies with net zero targets.

Net Zero Pledges Report Key Findings

The Net Zero Tracker report analyzed the net zero pledges of businesses and governments. It involves published plans on how they will achieve their goals, actions they are currently taking, and published progress reports.

Notably, the report found that firms responsible for high levels of emissions (oil companies) were more likely to declare net zero plans.

But only 38% of all those firms studied said their emissions reductions will cover all “Scope 3” emissions. Scope 3 emissions include the emissions produced by the end-use of a company’s product. It’s an important factor when assessing the climate impact of firms that produce oil, gas, and coal.

Here are the other major findings of the net zero pledges inventory for 2022.

Fossil fuel firms had the 2nd highest percentage of net zero goals, at 49% of the total.
Carbon offsetting or buying carbon credits for emissions reduced elsewhere is found dominant among corporate strategies.
About 40% of the Forbes 2000 companies with a net-zero target plan to use offsets, despite concerns about the lack of regulation.
702 companies on the Forbes Global 2000 now have net zero targets, up from 417 in 2020.
But 65% of those firms show lacking clear information about the GHG being measured, or how much they intend to rely on carbon offsets to meet their targets.
There’s a dramatic increase in the number of national laws and policies covering net zero targets. These went from covering 10% of national GHG emissions in 2020 to 65% in June 2022.
The number of big cities with a target doubled, up from 115 in 2020 to 235 now. But 900 large cities worldwide still have no net zero targets.

Given that analysis, John Lang, one of the authors noted that governments need to have legal standards and regulations in place to ensure net zero progress by companies. He also added that:

“At the moment, companies are confused about what’s needed from them… They don’t know what information has to be disclosed… We have to have mandatory, top-down regulations to guide them.”

Another author remarked that corporate ambitious interim targets are vital to delivering net zero and limiting cumulative emissions. He said that:

“Clear interim targets can be the solution to both the climate and energy crises; by providing the guardrails to accelerate the shift away from fossil fuels.”

Corporate Net Zero Commitments

During the Glasgow conference (COP26) last year, the UN formed an expert group to come up with net zero standards for the private sector. 

Article 6 of the Paris Agreement is at the top of each nation’s agenda at COP26. It governs the structure of carbon offsets and carbon credits as part of climate goals.

Large companies have been setting ambitious net zero pledges such as these major airlines, Chevron, Del Monte Foods, Disney, Stellantis, and more.

Some follow the world’s target to hit net zero emissions by 2050 while others set targets 10 years earlier. 

The firms believe that they have lofty climate goals already. But the report asserted that most of them have “unacceptably low” targets to be carbon neutral by 2050. Their long-term plans will not do much to halve emissions in the next 8 years that’s vital to stem climate change.

The diagram below shows the state of corporate climate commitments.

To help encourage action on corporate net zero targets, the UN again launched a group aimed at businesses, investors, cities, and regions last March 2022.

The goal is for the entities to make transparent and credible targets with stronger standards. It’s also to speed up the implementation of those plans.

Other initiatives were in a place like increased financial reporting requirements to boost and guide corporate net zero pledges. Examples are the Taskforce on Climate-Related Financial Disclosures and the proposed rules by the Securities and Exchange Commission.

Here’s the per sector ranking in terms of the most net zero pledges:

hospitality
fossil fuels 
materials such as steel and cement, 
transportation, 
food & beverage and 
agriculture

The UK and Italy have the most companies with at least some net zero goals like 72% and 70% of their businesses have targets, respectively. But in the U.S., only 36% of companies have made at least some net zero initiatives.

Despite flaws and credibility gaps, one more author stated that it’s still possible that the flood of net zero promises can create a virtuous cycle. According to him:

“It requires companies to step up, regulators to step up, civil society to be ready and researchers so that this really improves over time.”

The Net Zero Tracker 2022 report analyzed the inventory of net zero pledges from its database of more than 4,000 entities.

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Saudi Aramco published its first sustainability report that outlines ways how it can reduce its emissions, including 16 million carbon offsets.

The world’s biggest oil company detailed its plan and strategies on how to abate its carbon emissions in its first-ever sustainability report.

The report also reveals the company’s interim climate targets to achieve by 2035. And a big part of that goal is to use 16 million carbon credit offsets or metric tons of CO2e each year.

Before releasing the report, the oil firm announced its ambition to reach net zero Scope 1 and 2 emissions by 2050.

At a glance, here are Aramco’s primary climate goals:

Produce 11 million mt/year of blue ammonia by 2030
Reduce more than 50 million mt of CO2 equivalent annually by 2035
Reach net zero Scope 1 and Scope 2 emissions from its assets by 2050

Aramco’s Upstream Carbon Intensity (Scope 1 and 2 Emissions)

Saudi Arabia, the biggest oil exporter, made a pledge to have net zero emissions by 2060, 10 years later than Aramco’s goal.

Aramco is now rapidly reducing its GHG emissions. At the same time, ramping up its most sustainable capacity for crude oil (from 12 million b/d now to 13 million b/d by 2027).

The firm’s chairman Yasir al-Rumayyan stated in the report:

“Reducing emissions from energy production and use, while at the same time satisfying the world’s growing energy requirements, is the biggest dual challenge facing our industry.”

Saudi officials believe that demand for the country’s crude will remain strong. That’s because the country enjoys low cost and low carbon production.

Aramco aims to reduce its net Scope 1 and Scope 2 emissions by 52 million mtCO2e annually by 2035.

Right now, here’s the oil major’s Scope 1 and 2 GHG emissions.

To cut down these upstream emissions, Aramco is making use of the Circular Carbon Economy framework. It focuses on reducing, reusing, recycling, and removing GHG emissions. Under this model, the firm aims to achieve emissions reduction by 2035 with these interim targets:

Renewables investment: 14 million Mt of CO2e reduction/year
Carbon Capture, Utilization, and Storage (CCUS) investment: 11 million Mt of CO2e reduction/year
Energy efficiency improvements: 11 million Mt of CO2e reduction/year
Methane and flaring reduction — 1 million Mt of CO2e reduction/year
Carbon credit offsets — 16 million Mt of CO2e mitigation/year

The company also plans to further reduce its upstream carbon intensity despite being the lowest in the industry.

It seeks to cut it by 15%, from 10.2kg CO2 equivalent per barrel of oil equivalent (boe) to 8.7kg of CO2e/boe by 2035.

When it comes to Scope 3 emissions (supply chain and customers’ use of products), Aramco has not reported it yet. But the firm is investing in hydrogen and renewable energy sources that support customers to access lower carbon products.

The report also outlines the oil giant’s focus on developing its blue ammonia and hydrogen business. In particular, it seeks to produce up to 11 million metric tons of blue ammonia per year by 2030.

The goal is to support emissions reductions in hard-to-abate sectors like heavy-duty transport, heating, and industrial applications.

Aramco’s Carbon Credits and Offsets

Aramco will further cut its emissions by 14% in 2035 by investing in projects that produce up to 16 million carbon offsets annually.

Carbon offsets refer to the units of carbon credits that Aramco plans to earn through emission reduction projects. One carbon credit equals one metric ton of GHG emission removed or avoided.

The use of offsets is an important part of Aramco’s net zero goal as they enable the mitigation of hard-to-abate emissions.

By buying carbon credits in the carbon market, the firm can offset its emissions in reduction elsewhere. In effect, the carbon credit offsets allow Aramco to speed up its reduction efforts.

In 2021, Aramco’s Scope 1 emissions jump by 4% after the start-up of its Fadhili Gas plant. Meanwhile, the company saw a 14% drop in Scope 2 emissions due to a shift in consumption of electricity from third-party to company-owned power generation.

Aramco is now exploring the use of natural climate solutions to generate carbon credits. In fact, it partners with Public Investment Fund (Saudi Arabia’s wealth fund) to be the first member of the Riyadh Voluntary Exchange Platform.

The platform is where trading of carbon credits and offsets will happen in the Middle East and North Africa. This MENA voluntary carbon market (VCM) which Aramco is part will take off next year.

The initiative is timely as it can tap the growing demand for carbon credits (offsets) in the VCM.

Aramco said in its report that carbon credits are vital in their journey to reach net zero emissions by 2050. Their use will help the company reduce emissions and be more sustainable.

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U.S. Democratic senators introduced a new bill that will force the military to speed up its efforts to use electric non-tactical vehicles.

Sens. Elizabeth Warren and Mazie Hirono plan to introduce the Military Vehicle Fleet Electrification Act.

Their proposed legislation requires that 75% of the Pentagon’s non-tactical vehicle purchases in 2023 be electric or zero-emissions.

The Military’s GHG Emissions

According to research, the US military is a major polluter, and since 2001 has produced more than 1.2 billion metric tons of GHG.

That means the military emits more than what the entire countries like Denmark and Portugal do.

Also, the Pentagon accounts for 56% of the government’s GHG emissions, according to the White House.

The bulk of military emissions come from its operations – moving people and things around. Plus, it also owns a lot of property and has many buildings to heat and power.

The US Army’s climate plan, unveiled earlier this year, seeks to achieve a 50% reduction in Army net GHG emissions by 2030, compared to 2005 levels. And it aims to hit net zero GHG emissions by 2050.

In particular, it seeks a fully-electric non-tactical fleet by 2035. It’s also planning for an all-electric, light-duty, non-tactical vehicle fleet by 2027. While it aims to have fully-electric tactical vehicles by 2050.

The Department of Defense is exploring hybrid and fully-electric technology to be used on the battlefield.

Right now, the military is researching the potential of hybrid-electric drive for its tactical vehicles.

In fact, the DoD plans to test the performance of its first hybrid Bradley Fighting Vehicle in Arizona later this year.

It also has electrification works underway for Humvees and Joint Light Tactical Vehicles.

According to Sen. Warren:

“Transitioning the military’s non-tactical fleet of vehicles to electric or other zero-emission vehicles would have a significant impact on the U.S. government’s greenhouse gas emissions… This is an effective solution that helps us tackle the climate crisis and keeps the military ready for the future.”

The Bill for Military Electric Non-tactical Vehicles

The Senate bill will be a companion to a House bill introduced in April by Rep. John Garamendi, the House Armed Service Committee’s Readiness subcommittee chair.

It is co-sponsored by Sen. Dick Durbin, Sen. Sheldon Whitehouse, Sen. Ed Markey, and Sen. Angus King.

The DoD’s interest in hybrid and fully-electric vehicles for all its non-tactical and tactical fleet is obvious.

And that’s not only because of their environmental benefits but also of their operational advantages. This includes the ability to move more silently, for instance.

The proposed climate law covers cars, vans, and light-duty trucks (non-tactical) that the department buys or leases itself. It also applies to leases from the General Services Administration.

At the present, the DoD has an inventory of over 174,000 non-tactical vehicles. While its tactical fleet has over 250,000 units.

One of the biggest challenges the department faces with electrifying its tactical fleet is having its tactical recharging capabilities on the battlefield.

But its climate strategy claims that the military service desires to devise a tactical recharging solution by 2050.

And so, the proposed law will allow the DoD to build electric charging stations at its installations. Also, it will require the Pentagon to use only non-proprietary, interoperable charging ports and connectors.

Interestingly, the bill demands that the sources for electric batteries would be from the US or its allies. It prohibits sourcing from what the bill called “hostile nations” (ex. China or Russia).

Garamendi said when introducing the bill:

“Transitioning the military’s enormous fleet of passenger cars, light-duty trucks, and vans with internal combustion engines to American-made electric and zero-emission vehicles is a common-sense way to reduce emissions.”

The bill for military electric vehicles is endorsed by these environmental groups.

Securing America’s Future Energy (SAFE)
National Electrical Contractors Association
Natural Resources Defense Council
National Mining Association
International Brotherhood of Electrical Workers
E2 (Environmental Entrepreneurs)

The target date for the ambitious bill to take effect is at the start of fiscal 2023, or October 1, 2022.

The legislation follows other recent actions by lawmakers to abate the military’s impact on the environment.

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